JD: 2022 Q1 Earnings – Key Points to Know!
- Rupam Deb
- May 20, 2022
- 2 min read
JD.com reported its 2022 Q1 results on 18 May 2022. Overall, the company was still growing well, with customer accounts and revenue growing y/y at 16% and 18% respectively, while holding its profitability well, and with no material surprises.
During the quarter:
Annual active customer accounts grew 16% to 581 million accounts.
Net revenue grew 18% to RMB 240 billion, with net service revenues growing faster (at 26%, to RMB 35 billion) compared to net product revenues (17% growth to RMB 204 billion).
With the acquisition of Dada completed in end February 2022, JD now breaks down its financials into four segments, with JD Retail’s revenue growing at 17%, JD Logistics’ revenue growing faster at 22% (with revenue from external customers increasing from 55% to 58% of total revenue), New Businesses’ revenue growing slower at 12%, and with the new Dada segment contributing a small RMB 0.7 billion revenue for about 1 month’s business (consolidated).
On profitability, gross profit margin decreased slightly y/y from 14.3% to 14.0%. However, when we look at the fulfilled gross profit margin, which is the more relevant measure to look at (as explained in our detailed research), that margin remained stable at 7.5%.
Operating profit margin (OPM) (excluding gain on sale of development properties) increased y/y from 0.8% to 1.0%, mainly driven by a 0.4% point decrease in R&D expense as a % of revenue (from 2.2% to 1.8%). Thus, JD’s operating profit grew by ~45% to RMB 2.4 billion. If we look at each of the segments, JD Retail’s OPM was 3.6%, a decrease from the 4.0% a year ago, primarily due to marketing expenses for the Spring Festival Gala sponsorship, and to a lesser extent, the softer fulfilled gross margin during the outbreak. As a reminder, JD is targeting mid to high single digit margin in the long term, and previously we have used 5% to 9% in our valuation of JD. For JD Logistics…
For the remaining points of this article, check them out at our Multibagger Research Series (linked below).
For our free analysis of other high quality companies, check them out at our free Research Series (linked below).
For our summary analysis of the company, check out the video below.
Subscribe here if you want to be notified of future posts!
P.S. Do join our investment forum on Facebook too where we discuss interesting investment concepts and ideas. If you have enjoyed this article, you will enjoy our other articles here.
Comments